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Tuesday, 13 June 2006
Page: 7


Senator ALLISON (Leader of the Australian Democrats) (12:52 PM) —We have heard from the opposition that the bill before us amends the Royal Commissions Act 1902 to clarify the operation of the act in respect of claims of legal professional privilege. The Royal Commissions Amendment Bill 2006 is a result of a request by the Hon. Terence Cole, commissioner of the current inquiry into certain Australian companies in relation to the UN oil for food program, better known to most Australians as the Cole inquiry into the AWB. While the bill may assist the commission to get to the bottom of the AWB’s involvement in the kickbacks to the Saddam Hussein regime via the oil for food program, it will not in fact help to uncover the extent of the Australian government’s knowledge of the scandal or why the Australian government failed to act on no fewer than 29 warnings that it received on AWB’s possible involvement in those kickbacks.

The government’s fingerprints may not be all over the AWB’s feather-nesting of Saddam Hussein, but its failure to investigate warnings, to cooperate with UN investigations, to expand the Cole inquiry terms of reference or to take any responsibility and its blocking of Senate attempts to ask questions, we say, make it culpable nonetheless. This government has become arrogant and reckless and is abusing its parliamentary power to avoid responsibility, and this is one example of that.

The request to amend the Royal Commissions Act 1902, as this bill does, was made after Commissioner Cole rejected a legal professional privilege claim over the document referred to as the ‘draft statement of contrition’, which was inadvertently submitted to the inquiry by AWB Ltd. AWB subsequently applied to the Federal Court for review of Commissioner Cole’s decision, challenging not just the decision on the particular document but also his capacity to determine claims of legal professional privilege.

The Bills Digest notes that the litigation was in the context of long-running disputes over the production of documents by AWB Ltd. In February this year, Commissioner Cole said that the situation with AWB’s claim for legal professional privilege had almost reached the point of absurdity. Commissioner Cole further revealed, on 30 May, that he was not satisfied that the company had fully responded to 14 formal requests for documents over the last five months. It has also been reported that a further 1,200 documents or categories of documents, with a further long list of hundreds of documents, may also have been the subject of legal professional privilege claims by AWB.

The Federal Court held that the application by AWB should be dismissed, that the document in question was not subject to legal professional privilege and that Cole had the power in the circumstances of the case, as the document had been inadvertently provided to the inquiry, to form an opinion on whether the document was subject to legal professional privilege. However, the decision did cast some doubt on whether Commissioner Cole or any future person appointed under the Royal Commissions Act has the power to require the production of a document for inspection where a claim to legal professional privilege has been made. The court did not make a binding determination on this issue. Federal Court judge Justice Young did point out that in principle the privilege would prevent the commission from inspecting a document over which the privilege is claimed and that any abrogation of legal professional privilege to allow such inspection could be made only by clear and unmistakable language in the Royal Commissions Act, not merely by implication.

While legal professional privilege is an important principle of justice, concerns have been raised that some companies and some lawyers are making exaggerated claims for privilege or, in some cases, conduct certain business before a lawyer in order to claim legal professional privilege. Commissioner Cole was understandably concerned about the judgment, given the sheer number of documents that AWB have reportedly claimed legal professional privilege over. The explanatory memorandum to the bill says:

Mr Cole has expressed his concerns with the decision to the Australian Government and has sought urgent amendments to the RCA, noting that LPP claims have been made in respect of many documents that have not been produced to his Inquiry.

The bill therefore intends to put beyond doubt that any current or future commissioner appointed under the act may require the production of a document in respect of which legal professional privilege is claimed for the specific purpose of making a finding about whether to accept or reject it. The bill will still require the final decision to be reviewable by the courts. The Democrats believe that, given concerns that some companies and lawyers are increasingly taking advantage of legal professional privilege laws, it is appropriate that it is made clear that the commission has the right to determine whether in fact a document is subject to legal professional privilege. Because of this, we support the intent of the bill.

However, the Law Council questioned whether the commissioner would be influenced by the content of such documents when writing the report. The concern is that this may in turn lead to allegations of actual or apprehended bias by affected parties, which may be especially important in cases such as the Cole inquiry, where the commissioner is making findings of liability for individuals and corporations. Where legal professional privilege has been claimed before the commission, new subsection 6AA(3) makes it clear that the commission may require production of the document for inspection by the commissioner and/or an authorised person or persons for the purpose of deciding whether to accept or reject the claim. The Bills Digest notes:

... in practice under the Rules of Court in Australian jurisdictions, if it is undesirable for the judge who will hear the case to see the document in relation to which the claim of privilege is made, a discretion is allowed for the court to decide that the question of privilege should be decided by a different judge ... Issues of bias are completely avoided by this process.

Although this is an option under new subsection 6AA(3) of this Bill, it is not a specific requirement.

Unlike Labor, the Democrats do not think that there are appropriate safety nets in this bill to prevent bias. Therefore, I will be moving an amendment that will give the commissioner a specific discretion to have another authorised person related to the inquiry decide questions of privilege so that the final report is not influenced in any way by the material contained in documents, if found to properly attract legal professional privilege.

I will now return to the question of the government’s failure in its responsibilities to the international community and the Australian public. Whatever Mr Howard might say, politicians are not here just to score political points. This is not, after all, a game of football that we are conducting. In our view, government ministers have a very serious duty and obligation to serve the interests of the country and to do all they can to uphold their legal responsibilities.

The obligations of members of the United Nations, including Australia, to enforce sanctions against Saddam Hussein’s government were very clear. United Nations Security Council resolution 611 makes it clear that the government of Australia was bound to prevent any Australian company or individual making payments to the Saddam Hussein government or to anyone acting on behalf of that regime. In acknowledgment of the UN Security Council resolution, the Australian government in fact amended the Customs (Prohibited Exports) Regulations to say that goods could be exported to Iraq only if the Minister for Foreign Affairs granted an export permit.

The simple fact is that, whatever AWB has done, the federal government had the legal responsibility to know and to ensure that Australian companies were not breaching international sanctions. Clearly, they failed in this responsibility—and they failed despite receiving 29 different warnings that AWB may be involved in kickbacks to Saddam Hussein’s regime. You would think that one or two warnings would be enough, but to ignore 29 warnings suggests that they did not want to know.

From 1998 to 2003, Australian intelligence gave something like six warnings that the Iraq government were using transport companies, including the Jordan based Alia Corporation, to circumvent United Nations sanctions by charging commissions. From about January 2000, the Australian government received several warnings from the United Nations that AWB may be involved in giving illegal commissions to Saddam Hussein’s government. It is reported that in one cable the United Nations asked if Australia would make discreet high-level inquiries to ensure that AWB were not in breach of sanctions. To the best of our knowledge, no discreet high-level investigation was made and, instead, DFAT responded without first contacting AWB, saying: ‘We think it unlikely that AWB would be involved in a breach of the sanctions regime.’ There were 29 warnings that we know of, and they failed in that responsibility.

The government’s refusal to accept any responsibility risks causing major harm to Australia’s future agricultural, trading and diplomatic activities and, domestically, it further destroys public trust in governments. Even if they did not care about Saddam Hussein’s sanctions—although Mr Howard obviously cared enough about Saddam Hussein to attack his country, helping the United States to kill possibly 100,000 Iraqis in that event; but of course they do not want to know exactly how many there were, and there are still no confirmed figures—the failure to ask about Abu Ghraib torture, weapons of mass destruction, depleted uranium or Iraqi civilian deaths points to selective intelligence gathering and gross hypocrisy on the part of a government that has again damaged our standing in the international community.

Similarly, domestic scandals such as ‘children overboard’, Cornelia Rau and Vivian Solon demonstrate a government that refuses to take accountability seriously. It is an absolute disgrace that the Minister for Trade can state on 41 separate occasions and the Minister for Foreign Affairs can state on 27 separate occasions that they ‘could not recall’, ‘could not remember’ or ‘had no recollection’ whether they had read warnings about AWB’s possible involvement in providing kickbacks to Saddam Hussein’s regime. That is either sheer incompetence, which the ministers in question should be sacked for, or it is a wilfully arrogant government whose ministers, to avoid any responsibility or liability, purposely avoid formal damning communications.

These are ministers with front-line responsibility, including for the nation’s security, and they claim that they, or presumably their staff, cannot possibly read everything that comes across their desk. I would say it is lucky that AWB was not plotting a terrorist attack! As we know, a very different standard is applied to a person ASIO suspects of knowing another person who may be plotting an attack or may be just thinking about plotting an attack. They will be detained for days without legal representation—and their memory will have to be a lot better than that of the Minister for Foreign Affairs.

The experience of a number of Senate inquiries—most notoriously the ‘children overboard’ inquiry—has shown that ministers from this government deliberately and frequently use their personal staff as a firewall to excuse themselves from responsibility and full scrutiny about what occurs. Sometimes ministerial staff are used as scapegoats, are sacked or are promoted out of the office, and the minister simply wipes his or her hands clean of the messy, bothersome affair. Past inquiries in the Senate have identified this problem and proposed solutions—but of course these, too, have been ignored by this government. Again and again, members of the government have been able to get away with the lines ‘to the best of my knowledge’ or ‘I do not recall’, without facing proper, open and transparent scrutiny.

The prevailing culture of government deception and cover-up is made much worse with the government having control of the numbers in the Senate. The government may be reluctantly agreeing to fix the barrier to Commissioner Cole getting access to documents, but when are they going to fix the problem for the Senate? All sorts of excuses have been given for not supplying documents ordered by the Senate. We have had everything from ‘commercial in confidence’, to a document which is ‘provided to cabinet’ or is ‘legal advice’—the list goes on—and it remains as inconsistent as it has been over the last few years.

Unfortunately, Commissioner Cole has no powers to make determinations about whether ministers have done their jobs under Australian domestic law or have refused to hand over documents that might put them in a bad light. The Prime Minister refused to amend the terms of reference to allow Commissioner Cole to make findings as to whether ministers, their offices and departments have discharged their duties under Australian administrative law and under international law. But he has argued that Commissioner Cole is wrong in his claim that a change to the terms of reference is needed to make such determinations. We can only hope that Commissioner Cole puts that claim to the test. The Prime Minister obviously has something to hide.

In the February estimates, the government declared a blanket ban on public servants responding in any way to any questions about AWB and the Saddam Hussein kickback scandal. This gag was even extended to ASIO and to CrimTrac. There is simply no way that the government would have tried this on without control of the Senate. Surely this is a clear case of contempt of the parliament. The Clerk of the Senate, Mr Harry Evans, provided advice on this unprecedented move, stating:

... my colleagues and I have been unable to find any precedents for this direction.

He also pointed out:

On various occasions, questions have been asked and answered in estimates hearings about the conduct of commissions of inquiry, for example, the HIH royal commission in 2003 and the building industry royal commission in 2002.

Mr Evans, that fierce defender of the Senate’s role in holding the executive of government to account, will not be with us in three years time. His forced 10-year contract expires in 2009 because of laws that were passed in this place and supported by the ALP. His term cannot be renewed, as we all know.

We agree with the sentiments that are reflected in the ALP’s second reading amendment that was put in the House of Representatives—that is that, if the Howard government has nothing to hide in the wheat for weapons scandal, it would expand the Cole Commission’s terms of reference to allow Commissioner Cole to make such determinations. But the most galling aspect of the government’s behaviour is its refusal to ask precisely how this failure occurred so that it can ensure that such an economically and diplomatically damaging scandal does not happen again. The insistence by government members and officers that they could not or should not have done anything differently beggars belief. Apparently, we must all sit and wait and see if something like this happens again, because nothing is going to be done to stop it happening. Once again, we are seeing the consequence of a government having total control of the Senate—an attitude which displays serial contempt for the electorate.

If Mr Howard continues to refuse to extend the royal commission’s terms of reference, as Commissioner Cole indicated is necessary, then, at the very least, Mr Howard should have the gumption to admit that the government failed in its responsibilities and outline how he and his ministers will ensure it does not happen again. We say that it is time that this government started acting like a government: in a responsible, accountable and transparent manner. The arrogance of this government is a disgrace to this country.

The Democrats will be moving amendments that will overcome the problem identified by the Law Council and encourage the commissioner to consider allowing another member of the commission to make a judgment about legal and professional privilege, removing any real or perceived bias that might arise from sighting a document which it is subsequently determined should not be admitted on the basis of legal professional privilege.